The sunk cost fallacy and why letting go is the smartest choice

There is a certain nobility in persistence. The athlete who trains through pain. The friend who stays when it gets hard. The lover who forgives. But somewhere along the spectrum from virtue to vanity lies a trap we rarely see until we're neck-deep in it: the sunk cost fallacy.

At its most basic, the sunk cost fallacy is this: we continue investing in something not because it still makes sense, but because we've already invested so much. It doesn’t matter if the project is doomed, the relationship exhausted, or the job hollowed out of meaning. We stay. We push on. We convince ourselves that quitting would waste the effort, money, or time we've already poured in.

Of course, that effort, money, and time is already gone. It's sunk. The rational decision is to consider only what happens next. But we are not rational creatures. We are narrative ones. We don't just make choices—we defend them. And the more we've sacrificed, the more invested we are in proving we were right to begin with.

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This is why people remain in jobs they despise for years, long after their curiosity has died. It's why toxic relationships drag on for decades. It's why governments throw more troops, more money, more spin at wars everyone quietly knows are unwinnable. To walk away is not just to stop; it's to admit defeat. And in a culture that worships perseverance, defeat feels like betrayal.

Behavioural economists trace the fallacy to three psychological forces: loss aversion, commitment bias, and over-optimism. But it runs deeper than cognitive error. It speaks to something almost existential. To give up is to fracture the story we tell about who we are. The sunk cost fallacy doesn't just prey on our wallets or calendars. It preys on our identities.

Which is why letting go is so hard. It isn’t just practical; it’s philosophical. It forces us to admit we might have been wrong, that our time and energy might have gone nowhere. And if we admit that once, what else might collapse under scrutiny?

But there is another way to look at it. Letting go is not an admission of failure. It’s a reassertion of agency. It's a refusal to let yesterday's decisions write tomorrow's script. It’s pruning the dead branches so that something else might grow.

We love stories of grit—of those who never give up. But maybe we need more stories about those who did, and were better for it. Those who stepped off the path, not out of cowardice, but clarity. Who recognised that the road ahead was not redemption, just repetition.

To escape the sunk cost fallacy is not to surrender. It is to reclaim your right to change course. And in a world that constantly tells us to hold on, that might be the most radical act of all.